The Stuff That Makes the World Go Round

By Leslie H. Gelb; Leslie H. Gelb will become the foreign affairs columnist of The New York Times in January. He has been the deputy editor of The Times's editorial page and the editor of its Op-Ed page.

Published: December 9, 1990

IN 1891, Abdul Rahman, the nominal governor of Riyadh, fled with his family from the city, then under the control of a hated rival. His son, the future King of Saudi Arabia, Abdul Aziz ibn Saud, made part of that journey in a bag hung on a camel. The Saud family wandered in exile until invited to the city-state of Kuwait, ruled by the Sabah family.

A hundred years later, the Sabahs fled across the same desert in their helicopters and Mercedes-Benzes just ahead of Saddam Hussein's Iraqi hordes. And the Sabahs, not reputed for their largeness of spirit, do not hesitate to remind their hosts of the old debt.

It would be totally out of character for the low-key present Saudi rulers, however, to say they expect assistance of a similar kind from their current American protectors. Yet as we learn in "The Prize," Daniel Yergin's timely book, long before the assurances of the Carter and Reagan Administrations, President Harry S. Truman virtually committed the United States to the defense of the Saudi realm. In 1950, he wrote to King Ibn Saud that Washington "is interested in the preservation of the independence and territorial integrity of Saudi Arabia," and that threats to the kingdom would be "a matter of immediate concern to the United States."

These are among the roots and cycles recaptured by Mr. Yergin in a work that deserves to become the standard text on the history of oil. Half historian and half energy expert, Mr. Yergin, the president of Cambridge Energy Research Associates and the author of "Shattered Peace," is almost uniquely qualified for the task. "The Prize" exceeds in comprehensiveness and care the only comparable effort, a study (and a good one) about the major oil companies entitled "The Seven Sisters," by Anthony Sampson.

Historians will point out that Mr. Yergin essentially retells familiar stories. Economists will quibble about his failure to provide a theoretical apparatus to guide the reader through the various rounds of expansion and consolidation in the oil industry. Partisans will lament his avoidance of the charged debate over whether the oil barons and their political allies have been greedy devils or mostly instruments of market forces.

But Mr. Yergin's clear aim is not to break new ground, to theorize or to blame. It is to pull together a heretofore indigestible mass of information and provide a much-needed historical map. And he has done so with an eye toward the colossal personalities and forces that have drawn and redrawn that map.

There are, of course, the familiar figures, like John D. Rockefeller, the founder of Standard Oil, and J. Paul Getty and Armand Hammer, the famous independent oil tycoons. Very early in the tale of oil, a critical role is played by the Nobel brothers, Robert and Ludwig. Robert turned out to be instrumental in the development of the Baku oil fields in the Russian Caucasus, long before his guilt over being the dynamite king inspired his Nobel Prizes.

Not the least of the characters was Mohammed Mossadegh, chosen as Prime Minister of Iran in 1951, when the Shah was pushed aside and the oil fields nationalized. Truman dispatched Averell Harriman to explain to Mossadegh that he couldn't expect more for a barrel of oil than the oil companies earned. When told by Mr. Harriman that nothing can be larger than the sum of its parts, the Prime Minister responded, "That is false." Consider the fox, he continued. "His tail is often much longer than he is." And the Prime Minister laughed uproariously. He later explained to the American envoy that he could not survive if he compromised on oil pricing because of the power of the Ayatollah Seyed Kashani. Harriman, ever determined, visited the Ayatollah, who told him all foreigners were evil, and that those who interested themselves in oil could find themselves butchered.

Perhaps the most colorful of all the oil lions was Calouste Gulbenkian, a financier and deal-maker from Istanbul who played a pivotal role in bringing together money and oil before the turn of the century in Russia, and thereafter in the Middle East. His shrewdness earned him the sobriquet Mr. Five Percent. But for Mr. Yergin, his most endearing quality was his reputation for being "totally and completely untrusting."

Untrusting and, Mr. Yergin could have added, with a clearsighted understanding of the power of oil. Some of our most untrusting leaders never seemed to have grasped the point. After the outbreak of war between Israel and the Arabs in 1973, President Richard Nixon warned Arab oil producers that they wouldn't be able to sell their black gold at exorbitant rates. "We and Europe are the market," he said, and "if they continue to up the price they will lose the markets." A month later, the Arabs initiated their oil embargo and prices jumped to a historical high.

THE point was, and remains, that oil and not man has been in the saddle -- ever since man discovered it could be used to make light and fuel modern society. The point was, and is, that oil has meant more than fabulous wealth and power; it has created an umbilical dependency. Modern transportation, factories and food production feed on oil. Almost nothing that makes modern man and society go round can work without oil. In this way, it surpasses gold and coal and all the other precious resources that have driven history.